Edexcel Economics 3: Business Economics And Economic Efficiency 6EC03 01 06 Jun 2017

Anyone else do this exam?

Reply 3

Original post by usi227

Anyone else do this exam?

I did

+1

What did everyone think? I did q10 . Found the 8 and 12 a bit strange, not sure if I hit the marking points. The 16 wasn't too bad but I was a bit low on time. Multiple choice wasn't too bad imo.

Reply 6

ollismith

Some Multiple choice questions especially the price discrimination holiday resort question, the monopolist buying the perfect competition firms and the commodities falling in price question were unexpected and tricky. I've never come across them in past papers before! I did question 10, felt like d was a nice question regarding strategies to increase profit, although timing was a slight issue.

Reply 7

Original post by ollismith

Some Multiple choice questions especially the price discrimination holiday resort question, the monopolist buying the perfect competition firms and the commodities falling in price question were unexpected and tricky. I've never come across them in past papers before! I did question 10, felt like d was a nice question regarding strategies to increase profit, although timing was a slight issue.

Can you remember what you wrote for q10 b and c? I think B was something to with economic efficiency and the national fuel price and C was whether or not independent firms would continue to leave the market. Both were pretty hard I thought. :colondollar:

Reply 8

Original post by ollismith

Some Multiple choice questions especially the price discrimination holiday resort question, the monopolist buying the perfect competition firms and the commodities falling in price question were unexpected and tricky. I've never come across them in past papers before! I did question 10, felt like d was a nice question regarding strategies to increase profit, although timing was a slight issue.

With the price discrimination one I think you had to draw in a horizontal marginal cost and read off the prices.
Monopolist buying perfect competition was to do with output and price right? I think that one was rising price and fall in output-
The commodities one was pretty hard - think I redrew that diagram about 3 times lol. I think since commodities represented a variable cost MC didn't shift so prices rose and output rose too. Don't quote me on these I'm not 100% on them myself! :biggrin:

Reply 9

I did this paper, I did question 10 as well. For the monopolist multiple choice they're moving closer to monopoly. They would be exploiting customers more so prices would rise and output falls. What were your points for the 16 marker? I put collusion, predatory pricing, advertisement and integration. I do not remember the commodities question but I remember the Holiday resort question. I just read off the graphs the point where TR would equal TC

Reply 10

14leeh1

1

anyone do question 9?

Reply 11

The commodities question meant that variable costs would fall for the firm so its average and marginal costs would fall. Can't remember the actual ins and outs of the question but im sure if you had drawn a correct diagram showing these falling then you would get to the correct answer. That's what I did anyway. And for the monopolist one I drew a cost curve diagram for a perfectly competitive market then added on an AR and MR line for the monopolist and it clearly showed that price would rise and output would fall. I'm interested to know how many people will have entered for this exam as its a legacy paper! Are you all taking Unit 4 next Tuesday too?

Reply 12

Original post by marvellousminty

The commodities question meant that variable costs would fall for the firm so its average and marginal costs would fall. Can't remember the actual ins and outs of the question but im sure if you had drawn a correct diagram showing these falling then you would get to the correct answer. That's what I did anyway. And for the monopolist one I drew a cost curve diagram for a perfectly competitive market then added on an AR and MR line for the monopolist and it clearly showed that price would rise and output would fall. I'm interested to know how many people will have entered for this exam as its a legacy paper! Are you all taking Unit 4 next Tuesday too?

Yes I'm redoing unit 4 aswell, what were your points for the 12 marker and the 16 marker?

Reply 13

Original post by marvellousminty

The commodities question meant that variable costs would fall for the firm so its average and marginal costs would fall. Can't remember the actual ins and outs of the question but im sure if you had drawn a correct diagram showing these falling then you would get to the correct answer. That's what I did anyway. And for the monopolist one I drew a cost curve diagram for a perfectly competitive market then added on an AR and MR line for the monopolist and it clearly showed that price would rise and output would fall. I'm interested to know how many people will have entered for this exam as its a legacy paper! Are you all taking Unit 4 next Tuesday too?

Sorry my mistake- variable costs meant that MC shifted too. I'm retaking unit 4 on Tuesday too! 2 hours....

Reply 14

Original post by Afc98

Yes I'm redoing unit 4 aswell, what were your points for the 12 marker and the 16 marker?

I cant remember the specifics for my 12 marker but i remember evaluating by saying that incentives to keep x-inefficiency are low in a monopolistic market for one point and then i think i said something about if the national price was lower than the price the original firm was setting then it would be possible for productive or allocative efficiency to be achieved but that this would be less accessible for smaller firms who required larger profits in order to keep up with the supermarkets etc.

16 marker i did predatory pricing explored this then evaluated with sr profit loss for lr profit gain; easier for the supermarkets to execute than the independents due to cross-subsidisation/economies of scope; then did loyalty schemes such as morrisons loyalty cards and stuff then evaluated by saying that providing such schemes increases costs for the firms as they have to provide a reward for loyalty and said this would be easier for larger firms as they have greater supernormal profits to be able to allow for this. Finally said something about two rival firms could work together eg. how esso let you get tesco clubcard points when you shop there which can then be exchanged for restaurant vouchers etc. Said this could mean that PED of consumers becomes less elastic for petrol as they perceive that theyre gaining benefits from spending more money at esso.

I'm worried my evaluation points might have been a bit repetitive but i put quite a lot of different points in there so fingers crossed its not too bad.

Reply 15

What are we all thinking grade boundaries will be like? Last year was only 63 for an A* did you find it more or less difficult?

Reply 16

Original post by Afc98

Yes I'm redoing unit 4 aswell, what were your points for the 12 marker and the 16 marker?

For the 12 marker about the firms leaving the market I think I mentioned
Supermarket petrol price wars meaning the independent firms cannot compete and will lose revenue (did a fall in revenue diagram)
Ev: Something to do with being found out by regulators and being fined

29% of visitors go to the petrol station for coffee so I said that if the independents diversify and stock good quality coffee .e.g. Costa they won't have to solely compete on petrol prices.
Ev: can't remember

Also it depends whether price falls below AVC to see whether they leave the market in the short run.
Ev: Persistent losses will result in the independents leaving the market in the long run.

For the 16 marker about how they could increase profit I was so rushed but briefly explained.
Predatory pricing in the short run to drive out competitors and gain market share in order to profit maximise in the long run with fewer competitors in the market
Ev: Illegal so could be fined by regulators

Could heavily advertise in the market to gain brand awareness
Ev: Game theory - did a pay off matrix and explained that if both firms advertise then less profit will be made.

Literally had 5 mins left at this point
Sales Max in SR to increase market share (really similar to pred pricing point)
Ev: could be driven out the market since it is so competitive

Loyalty schemes e.g. Sainsbury's nectar points
Ev: expensive to carry out. Large opp. cost.

Have no idea if any of this is credit worthy but it would be interesting to compare with what you guys did.

Reply 17

Original post by 14leeh1

anyone do question 9?

My mate who was retaking did q9 and he said he found it quite hard.

Reply 18

I was scared that you could only talk about pricing strategies and non pricing strategies when the 16 marker asked about profit. I wasn't sure if I could talk about collusion and intergration

Reply 19